Changing management companies can feel like a big job for a volunteer board. The good news is that most transitions follow the same basic pattern. When the board plans ahead, keeps owners informed and gathers the right records, a change can often be more orderly and less stressful than many boards expect.
This guide walks through the steps in plain language. Every association is different, so treat it as a starting point and check your own governing documents along the way.
1. Start with your governing documents and current contract
Many boards start by reading two things: the association’s governing documents (declaration, bylaws and any rules) and the current management agreement. The documents explain how the board makes decisions and what authority it has. The contract explains how and when it can be ended.
Look for the notice period, how notice is to be delivered, any fees tied to ending early, and what the contract says the current manager hands over at the end. If anything is unclear, consider asking an attorney before giving notice. A short review early on may help avoid confusion later.
2. Decide as a board, and record the decision
A change in management is typically a board decision made the way your documents describe, often by a vote at a noticed meeting. Many boards record the vote in the minutes, which can give the association a clear record and help everyone understand when and why the change was made.
3. Choose the new company before you give notice
Many boards find it helpful to have a new manager selected, or at least narrowed down, before sending notice to the current one. This can help reduce the chance of a gap where bills are missed or owners are unsure where to send dues. Ask for proposals, compare what each plan includes, and pick a start date that lines up with the end of the current contract.
When comparing proposals, focus on what services each plan covers, how communication works, what reports the board will receive and how the company handles a transition. Price matters, but many boards weigh how well a plan fits the association’s needs alongside cost.
4. Give written notice
Notice is typically sent in writing, following the method the contract describes. Many boards keep it short and professional: the date of the board’s decision, the final day of service and a request for the association’s records and funds. A courteous tone may help the handoff go smoothly.
5. Gather the records
In general, an association’s records belong to the association, though your documents and applicable law control. A typical handoff may include:
- Governing documents and any amendments
- Board minutes and meeting records
- Owner list with contact details and account balances
- Bank statements, the general ledger and recent financial reports
- The current budget and any reserve study
- Insurance policies and vendor contracts
- Open items, such as unpaid invoices or pending architectural requests
Many incoming managers use a checklist to help organize what comes over. A few follow-up requests are common.
6. Move the money carefully
Bank accounts are often the part of a transition that deserves extra care. Boards typically decide who will be signers, how operating and reserve funds will be moved, and when. Consider reconciling the final statements from the prior manager against what arrives in the new accounts. A new manager may be able to help with this step, while the board approves each move.
7. Tell the owners
Owners want to know three things: who to contact, how to pay dues and whether anything changes for them. Send a short letter or email before the switch that covers those points and the effective date. Follow up once the new portal or payment system is ready. Clear, early communication may help reduce missed payments and confusion.
8. Settle into a new routine
The first few months can be a good time to talk about expectations, such as how often the board will receive financial reports, how meetings will be scheduled and how questions will be handled. Many managers aim to act as a guide here, raising issues and suggesting options while the board sets policy.
Common mistakes to avoid
- Giving notice too early. Without a new manager lined up, the association may be left without someone handling bills.
- Skipping the minutes. An undocumented decision may lead to questions later.
- Forgetting owners. A switch owners hear about late can feel bigger than it is.
- Rushing the money. Consider taking time to reconcile accounts before closing anything.
Frequently asked questions
How long does a transition take?
It depends on the contract’s notice period and how quickly records come over. Many boards plan for a couple of months from decision to a settled routine.
Do owners need to vote on changing managers?
In many associations the board makes this decision, but your governing documents control. If you are unsure, consider consulting an attorney.
What if the old manager is slow to hand over records?
Send a polite written request listing what you need. If records still do not arrive, the board may want to talk with an attorney about next steps.
Can we switch from self-management to a management company?
Often, yes. The steps are similar in many ways, but the records usually come from board members instead of a prior manager.
Thinking about a change?
Ironhorse Management has helped Montana associations since 1979, and we are happy to talk your board through the process. Learn more about our HOA management services, or request a proposal to see what a plan could look like for your community.
Please note: This article is for general informational purposes only and is not legal, financial or tax advice. Every association and situation is different. It’s wise to consult an attorney and/or CPA for legal or financial matters, and to review your governing documents and other appropriate resources before making decisions, rather than relying only on this article.
